Half Blame Feds for Healthcare Industry Mess

Karen Minich-Pourshadi, for HealthLeaders Media , February 21, 2012

Pumpian says with Medicare and Medicaid reimbursement cuts and initiatives like value-based purchasing hitting in 2012, it's not surprising that finance leaders rank their top three priorities as:

  • Patient experience/satisfaction (58%)
  • Cost reduction, process improvement (49%)
  • Payment reform, reimbursement (VBP, accountable care) (39%)

HCAHPS is the reason patient experience is at 58%, Pumpian says. "It's a major component of value-based purchasing and that's a key area for finance leaders. Plus you have to consider market share: How can you move market share from one facility to another? A lot of it comes from word of mouth from satisfied patients," she says.

Cost-cutting remains a priority for finance leaders, with 49% placing it in their top three priorities. Thirty-nine percent of survey respondents report the best opportunity for squeezing cost out of the operation will come from the labor line item. Just under half (44%) of finance leaders report they may cut labor costs by reducing employee benefits, while 38% may also implement a hiring freeze or a pay freeze (23%). 

"As a CFO, I don't think any of us see the economy bouncing back soon. We are now in the third year of high unemployment and what we are noticing is that there are fewer procedures being done by choice," says Pumpian. "People are afraid to access care now because they don't have the resources to pay for it. If [CFOs] are seeing a reduction in volume over three years, they may do permanent layoffs because they don't expect the volumes to return. Hiring freezes are one tool we use; we have to use our resources effectively."

This article appears in the February 2012 issue of HealthLeaders magazine.

Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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2 comments on "Half Blame Feds for Healthcare Industry Mess"

Alton Brantley, MD,PhD (2/24/2012 at 3:50 PM)
The reason for the discrepancy in the survey regarding government interventions is straightforward: What was sought from the government was standardization in data formats and interchange, so that medical information would not be tied into specific EHRs, and that different vendors and payers wouldn't make life more complicated for hospitals, health systems, and doctors. What the government provided was rigid coercion of adoption of incompatible systems and multiple changing expectations all occurring during the same time frame. The end result is that hospitals and doctors are spending more time changing systems, meeting deadlines, reprioritizing, and disrupting patient care. As an example of how this COULD have worked, the internet, specifically the web-supporting data standards, started simply, grew in a stepwise fashion, and have enabled an explosion of creativity and utility, without certifying browsers and setting up unreasonable and expensive conversion processes. The problem of physician adoption would have melted away from the aging of the clinical population (technicians, nurses, and doctors), and costs would have gone down, not up. Finally, had the government adopted state of the art technology, rather than the enshrined fixed field, positional coding structure of documents, computer processing could have been accomplished through evolution rather than gut-wrenching cutovers.

Phyllis Kritek, RN, PhD (2/21/2012 at 9:49 AM)
I am hoping that one of the analyses of this very excellent survey will grapple with three interacting and amazingly contradictory findings: 1. 59% of your respondents said the reason that the health care industry could not solve its own problems was "too much self-interest among the different stakeholders". The second highest response, which I think is related, focused on lack of incentive to innovate and garnered only 14%, so I consider this pretty high consensus. 2. Having established why the industry cannot save itself, the blame for the current state of affairs put the it squarely on the government (40%)! I was startled: we can't work together so we cannot fix ourselves, but it is the government's fault. 3. Then, the highest ranking answer for who will save the industry is hospitals (22%) unless you ponder the nebulous "other" at 31%. Apparently, we are going to save ourselves from the awful government intrusion while acknowledging we cannot do so due to competing self-interest agendas among ourselves. Your final analysis focuses on the need to collaborate as "the common theme". Recalling my freshman level logic classes, as I read this: a. We do not know how to work together, with our self-interest corroding our efforts at collaboration. b. We think we should be the ones to fix this. c. Therefore: it is all the government's fault. I look forward to an analysis of this interesting finding.




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